The Union Cabinet chaired by Prime Minister Narendra Modi has approved the Promulgation of Unregulated Deposit Schemes Ordinance, 2019.

Benefits:

The proposed Ordinance will immediately tackle the menace of illicit deposit taking activities in the country launched by rapacious operators, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings, by altogether banning unregulated deposit taking schemes, and having adequate provisions for punishment and disgorgement / repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.

Ban on unregulated deposit schemes implemented to prohibit illicit deposit-taking and provide penalties and disgorgement mechanisms. Immediate regulatory action establishes a ban on unregulated deposit schemes, prohibiting unauthorized deposit-taking activities and creating enforcement mechanisms including penal sanctions and administrative measures, and providing for disgorgement and repayment procedures to recover funds collected by prohibited schemes.